Tech Stocks Slide as Debt Concerns Hit AI Infrastructure Firms

A sell-off in technology shares accelerated on Friday, pushing the Nasdaq down more than 2 percent as investor anxiety over artificial intelligence capital spending outweighed gains in overseas markets, Yahoo Finance reported . Investors continued shifting capital out of AI-related equities into other sectors and bonds.

Selling was particularly pronounced among specialized AI cloud infrastructure providers, or 'neoclouds.' Shares of both CoreWeave and Nebius fell approximately 12 percent in New York trading. Markets focused on CoreWeave's debt load, sending yields on its corporate bonds sharply higher over the week as investors weighed refinancing and solvency risks.

Arun Sundaram, an analyst at CFRA Research, noted that stress is emerging in this corner of the AI ecosystem. Sundaram stated that the sell-off is primarily driven by financing risk and the potential for higher interest rates to increase ongoing debt service obligations.

Early momentum in Asian and European trading failed to hold. Reassuring remarks from Nvidia Chief Executive Jensen Huang regarding CoreWeave's financial position had supported Asian benchmarks overnight, where chipmakers SK hynix and Kioxia led advances in Seoul and Tokyo. However, European market gains dissipated once Wall Street opened. IG analyst Chris Beauchamp observed that investors dumped technology shares rapidly, noting that the overnight recovery offered only brief respite before selling resumed in the United States.

Broader market indices also finished lower. The S&P 500 fell 1.1 percent and the Dow Jones Industrial Average dropped 0.3 percent, pressured in part by rising energy costs as crude contracts gained more than 3 percent. West Texas Intermediate rose 3.5 percent to settle at $101.41 per barrel.

Speaking at International Monetary Fund and World Bank meetings in Bangkok, Federal Reserve Chair Kevin Warsh described AI as the most consequential economic shift in his lifetime. Warsh said the investment boom would lift prices in the near term but offer substantial long-term benefits to the global and U.S. economies, while warning that the transition would remain bumpy as market structures evolve.

Elsewhere in global markets, Indonesia's Jakarta Composite Index tumbled more than 11 percent—its steepest single-day drop since 1998—after index compiler MSCI cited transparency concerns that could prompt a downgrade from emerging-market to standalone status. Hong Kong's Hang Seng Index rose 0.5 percent to close at 24,186.83.